Struggling Aviragen Slashes 25% of Workforce, Considers Strategic Options

Published: Apr 04, 2017

Struggling Aviragen Slashes 25% of Workforce, Considers Strategic Options April 4, 2017
By Mark Terry, Breaking News Staff

Atlanta-based Aviragen Therapeutics announced that it plans to make a number of strategic business changes, including cutting 25 percent of its workforce. The company currently employs 21 people in research and development, and eight in corporate, administration, finance, and business development areas.

Aviragen focuses on anti-viral drug development. As part of its strategic review, it retained Stifel, Nicolaus & Company. It plans to look at a broad array of strategic options, including a business combination or strategic merger. It also will evaluate opportunities for in-licensing clinical stage programs, an acquisition, or other type of transaction.

In a regulatory filing yesterday, Aviragen noted that the company faces de-listing of its stock from the NASDAQ Global Select Market as the results of its shares closing below the $1 minimum for 30 consecutive business days.

“The company intends to monitor the bid price of its common stock and its minimum market value of listed securities and will consider options available to it to achieve compliance,” the company stated in the regulatory filing. The company also updated its pipeline status. BTA074, a topical antiviral for condyloma caused by human papillomavirus (HPV) is currently continuing in Phase II studies. Aviragen expects that enrollment will be completed in the second half of this year and that top-line efficacy data will be available in the first half of 2018.

Although it is still evaluating Phase IIb data of the vapendavir SPIRITUS trial, a previously planned Phase II trial of the drug in hematopoietic stem cell transplant patients has been canceled. On February 13, 2017, the company had announced disappointing results from the SPIRITUS trial in asthma patients with rhinovirus infection. The drug failed to show statistically significant decrease in the asthma control questionnaire-6 (ACQ-6) at day 14 after treatment.

The company is still working to resolve the U.S. Food and Drug Administration (FDA)’s clinical hold on its Investigational New Drug (IND) application for BTA585. One patient was hospitalized for an increase of a cardiac enzyme level tied to transient ECG changes.

A day after the failure, Joseph Patti, company president and chief executive officer, said in a statement, “We are very committed to the advancement of our pipeline and are confident of its potential to address considerable unmet clinical needs for patients with limited therapeutic options.”

The company also indicates that its development of its non-nucleoside inhibitor program to treat respiratory syncytial virus (RSV) is still making progress.

On February 2, the company announced its second quarter fiscal year 2017 financial results. Aviragen announced a net loss of $9.1 million for the three-month period that ended December 31, 2016. This compared to a net loss of $6.5 million in the same period in 2015. Basic and diluted net loss per share was $0.24 for the period, compared to $0.17 in the same period in 2015.

Revenue grew to $3.8 million for the three-month period from $1.7 million in the same period the year before. This was ascribed to non-cash royalty revenue connected to the sale of certain rights for Inavir in Japan to HealthCare Royalty Partners III in April 2016. Research and development expense grew to $10.2 million for the three-month period ending December 31, from $6.3 million in the same period in 2015. The increase was mostly connected to extra clinical trial activity and higher clinical and manufacturing costs linked to its three Phase II clinical trials.

Aviragen is currently trading for $0.65.

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